INVESTORS HAVE enjoyed higher returns from offices owned in Dublin docklands than properties in the City of London for the first time in four years, according to a report published today.
Ireland Quarterly Property Index, published by the Society of Chartered Surveyors Ireland and Investment Property Databank (IPD), which points out that property values are still falling in the district, even though rents have stabilised, is based on 294 properties worth €2 billion.
The office blocks, mostly newly built, have fallen in price by nearly 60 per cent since the financial crash, though a recent IPD global cities survey found Dublin now offers investors the world’s highest returns.
Though prices fell by 0.5 per cent between April and June, IPD said yesterday “prime office assets in Dublin’s docklands are predicted to be the first to see any sign of recovery”.
Two major developments – the Riverside II development and Custom House Plaza IV – have been bought over the last three months by a German investment fund and a private overseas buyer.
Colm Lauder of IPD said: “Though Irish property has yet to see any firm signs of recovery, when it comes about it is likely to follow the same pattern as was seen in the UK, with investors targeting heavily discounted prime assets that can secure strong, long-leased tenants, preferably from large multinational companies.”
He continued: “Investors are going to be extremely discerning when looking at Irish property but the recent sales in the docklands area, combined with an apparent stabilisation of rental values, are the first signs we have had in the last four years that money is willing to flow back into the market and that investors are keen to take advantage of the good value Ireland offers.”
The docklands have outperformed the rest of central Dublin over the last 12 months, offering investors a return of 4.8 per cent for the first six months of year, following a 3.4 per cent return in the last three months of 2011.
“In comparison, City of London offices produced less, with a total return of 4.1 per cent in the six months to end of June 2012,” said the IPD report.
